Mice homozygous for mutations at the microphthalmia (mi) locus have varying degrees of melanocyte deficiencies in skin, eye and ear, and varying deficiencies in mast cells, NK cells, and osteoclasts. Depending on the mutant allele, such mice are white, microphthalmic, and hearing~impaired. Heterozygotes either have no visible phenotype, or a mild melanocyte deficiency. Heterozygous combinations of certain mi alleles show interallelic~interactions, some aggravating and some lessening the severity of the phenotypes seen in corresponding homozygotes. Using a transgenic insertional mutation at the mi locus, we have isolated a gene whose expression is disrupted in the transgenic mice. This gene encodes a novel member of the basic~helix~loop~helix~zipper (bHLH~Zip) family of DNA~binding transcription factors, and is expressed in wild type mice in the melanocytes of the retina, ear and skin, and in mast cells. The gene is mutated in six different, independent mi alleles, suggesting that it is indeed the only one responsible for the pleiotropic mutant phenotype. Members of this class of genes have wide ranging roles in gene regulation, cell proliferation and development in species as divergent as yeast and humans. In vitro, bHLH~Zip proteins act as homodimers and heterodimers, a fact that provides a rationale for the phenomenon of interallelic interactions and suggests that dimerization of these factors also operates in vivo. Mutations at mi have been proposed as models for certain forms of human Waardenburg syndrome and for human vitiligo. The recent isolation of the human Mi cDNA will enable us to study potential mutations in these diseases. A second insertional mutation we have chosen to analyze is characterized by vertebral abnormalities similar to those seen in mutations in the pax~1 transcription factor gene on chromosome 2. This insertion, however, is not allelic with pax~1, which suggests that the gene interrupted by insertion may represent a target gene of pax~1. Our analysis has proceeded to the isolation of a region flanking the insertion and the characterization of an associated genomic deletion. An mRNA derived from this locus is currently being analyzed. The mutation is reminiscent of certain human vertebral diseases, and the molecular analysis of the mouse gene responsible for the phenotype may lead to the isolation of the corresponding human gene.